Weitz Law Firm - 520 Kirkland Way, Ste 103 - Kirkland, WA - (425) 889-9300

Sunday, October 7, 2012

QE3 - What is it and how does it effect homeowners

See a video from the Daily Ticker on yahoo Finance regarding QE3 ("Quanitative Easing"):

For those who have no back ground in what 'Quanatative Easing' is, I'll give a quick back ground that is hopefully easy to understand.

Essentially, all 'QE' amounts to is the buying of assets by the Federal Reserve. QE 1 sand QE 2 were focused primarily on buying 'Treasury Debt'. In essence, this increases the government debt and adds more money in the government that can be spent on 'stimulus' or simply to pay for traditionally governmental functions.

QE3, alternatively, focused on buying Mortgage Backed Securities ('MBS'). This essentially amounts to another bailout for the banks as they hold many of these MBS and the valuations by the Fed are likely far above what the market would dictate for these assets. The idea is that it will make the banks feel healthier and they will lend more to public for homes, businesses, etc. I remain skeptical as the none of the 'bailouts' to date have led to a dramatic increase in lending, so I question where QE3 will be much different than the other forms of bailouts which have benefitted the banks, and left the public out to dry. What it will likely do is lead to a nominal to marginal decrease in interest rates for a significant period of time.


For more information on your rights in distressed Real Estate, consider contacting a Seattle Real Estate Attorney.

Our Firm:

Weitz Law Firm, PLLC
520 Kirkland Way, Ste 103
Kirkland, WA 98033

weitzlawfirm.com

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